In general, people are interested in learning and becoming profitable traders. However, all beginners should think about recognizing the basics before actually getting started.Indeed, new traders tend to appreciate these tips imagining that it provides a guarantee of definite and permanent success. That's why they want more to know how to set up their tables so they can hurry and make money.But if we all would like to trade well, one of the relevant question would be:

What are the essential tips to ensure our success in trading?

To succeed in trading, you have to recognize that there is a set of rules to apply. These rules are so useful that we can be certain that they serve to guide all traders (whether experienced or not). This is reciprocal for any amount of investment. Each tip might be important, but when used properly, the effects are effective. Trading with these rules can significantly increase the chances of succeeding in the markets.Therefore, in this article I want to present some tips that will guide you to the path of success.Tip 1: Always use a trading plan.A trading plan is a set of rules that specifies the entry and exit criteria of currency change. A plan is b…

OVERVIEW OF CONVERGENCE AND DIVERGENCE IN FOREXfirst define the terms convergence and divergence. let´s goConvergence in forex describes a condition under which an asset's price and the value of another asset, index or any other related item move in the same direction. For instance, let's assume a situation in which market prices show an uptrend, and so does our technical indicator. In this case, we face continuing momentum, and there is high probability that the trend will persist. So, here, the price and the technical indicator converge (i.e. follow the same direction), and the trader may refrain from sale, as the price is likely to further grow.Divergence in forex, to the contrary, describes a condition under which an asset's price and the value of another asset, index or any other related item move in opposite directions. For instance, if we consider again a situation where market prices grow and the technical indicator's value drops, we will face decreasing momentum, and thus signs of trend reversal. The price and the technical indicator diverge, and therefore the trader may opt for running sale for procuring the highest profit.So, basically, forex divergence trading and conv…

The EUR / USD currency pair shifted us quite a bit in the week to the recent multi-year highs above 1.2500 levels. Long position from the 1.2200-1.2300 shopping area I closed at Profit-Targets. The rate for several years, the last days mostly very good data from the US, soothing on the stock markets, and surely the ECB's dissatisfaction with the development of the euro favor me in the next days rather price correction back to 1.22-1.23 bands. Also current technical bear signals indicate a possible downward correction. After closing the Eurodolar long positions of the week, Wednesday's accumulated smaller short positions. Even the foundation, and the ECB would still be holding the euro for a while. The currency pair USD / JPY has fallen sharply over the past few days to a medium-term strong support area. This was due to the exaggerated but short-term weakening of the dollar over the past 8-9 days, as well as to the fall in stocks and thus the preference of a safe Japanese yen. However, the situation may seem to stabilize today. For the further strengthening of the Japanese yen, I still do not see a serious reason, and the correction of the weakening dollar should bring this curr…

The goal of a successful trader is to make the best trades. Money is secondary. – Alexander Elder

Hello, my dear friends and fellow community members.1. INTRODUCTIONTo make sure that we, the members of the Dukascopy Community are profitable each and every month I want to share with you an idea that if we put into practice then we will definitely be in profits at the end of each month. We have to find out a system, in which our stop loss and take profit is predefined. Also, we have to make sure that our take profit level is at least 3 times from the traded price as much as the stop loss is.2. THE PLAN We will put 1% of our account at risk on every trade. And we will aim for 3% of the account if we are right. To understand what I am talking about, we need to do a simple mathematics. Let us say that we took 10 trades in a month in this manner, where we risked 1% to gain 3%. And let us say that 5 trades were not in our favor. In other words, the stop-loss was triggered. The price hitting stop-loss 5 times means we have lost 5% of our entire capital(as we had 1% at risk on each trade and 1*5=5). At the same time out of 10, we have also won the five trades. Winning 5 trades mean that …

In order to understand what breakout trading is, you have to understand that there are two types of breakouts. Well I am going to talk about two types of breakout trading setup:

Support and Resistance breakouts

Swing high and Swing Low breakouts

So what is breakout trading? Simply put it, breakout trading is an attempt to enter the market once the price moves outside a defined price range (support or resistance). However, the important characteristic of a genuine breakout is that it needs to be accompanied with increased volume. A chart speaks more than words can do so here is what support and resistance breakout trading should look like: Please take a piece of paper and a pen because what you’re about to learn next is very crucial and it needs to be immortalized. In breakout trading a genuine breakout is followed by a big, bold candle that closes well above the support resistance level. In the figure above, this can be noticed quite instantly. As a rule in breakout trading the bigger the breakout candle is the better. What is breakout trading of a swing high and swing low? Well, we apply the same rules as in the case of the support and resistance breakout trading but adding one…

Momentum based trading strategy is an investment strategy that aims to capitalize on the continuance of existing trends in the market. In order to take advantage of the perceived opportunity, a trader takes a long position in a currency pair that has shown an upward trending price, or short-sells a security that has been in a downtrend. The idea being once a trend is established, it is more likely to continue in that direction than to move against the trend. This article looks at how we can create a momentum based trading strategy in Visual JForex using the Commodity Channel Index (CCI) and Stochastic indicators.What is Visual JForex?

Visual JForex is a comprehensive solution to build, test and run strategies; it is based on a user-friendly interface using drag and drop feature. It has a unique way to develop fully automated strategies using blocks linked to each other to build a complete and ready-to-execute forex strategies. The platform is web based presenting a flash user interface with a Java backend.

Fig 1: Visual JForex platform.Momentum indicators

Commodity Channel Index

The CCI is an oscillator introduced by Donald Lambert in 1980 that is useful …

What is?It is a graphical pattern or a reversal figure that signals the shift from a high to low trend. But how does pattern formation occur? Generally the SHS (Shoulder Head Shoulder) is formed by three consecutive tops that are separated from each other by two.Image 1 - Head and shoulders formationThe tops 1 and 3 highlighted in the figure usually occur in the same price range and are the shoulders of the pattern. The top 2 is the tallest, is located between the shoulders and is known as the head of this reversal figure.The two points in the bottom are formed in the same price range, where it is possible to draw a horizontal line or a diagonal line with a slight slope linking them. This line is known as the neck line. It works as a support and plays a key role in confirming the pattern.What are the main features?1 - Occurs within a bullish trend. This means that tops and bottoms precede the formation of the pattern. The head is the last rising top, that is, the highest point of the trend.Image 2 - Head and shoulders projection2 - Projectio…

In a trading period of two years, from 2014 to 2016, I've tested a sentiment trading indicators. One was live traded, the Options Sentiment Indicator (OSI), and one was backtested during the same period. This other indicator was able to generate buy and sell signals on the Euro every single trading day, the sentiment proxy of the universe of texts courtesy of SMA.What was interesting is in theory the OSI, a proprietary indicator, acted as a noise trading indicator, able to profit in times of non-linearity, or during see-saw trends in the market for the Euro. And, the sentiment proxy from SMA, was able to capture a greater risk-reward ratio then a non-directional Euro from 2014 to 2016.Here's the EUR/USD chart for the corresponding time period of the study:TABLE RESULTSNow, to introduce the signal detection theory, it's important to note that this perception science has everything to do with signals presented, and signal responses. Similar to getting an eye exam, where the optometrist presents a series of signals on an x-y coordinate, the signal detection theory tests whether there were matching responses (a "hit"), or a failure to recognize the signal (a "miss"). Whats more, th…

February began in the financial markets very wild. Important assets are showing unprecedented or even historically record moves. We observe the sharp drops of brutally growing cryptocurrencies, strong declines in stock indices, bonds and oil, or a swing US dollar strengthening. For stock indices, it is not yet possible to talk about the final expected turnover, but the drops in the past 6 days are really significant and fast. Daily candles on the US Dow Jones index of over 500 but more than 1000 points are stunning. The definitive turnover of equity indices does not confirm the intraday development, where the continuing efforts of important Market Movers are still to reverse or at least significantly correct the intraday downturns. On the other hand, the market's reaction to news in the last days suggests a possible turn of the mines or their proximity. The data is very recent in the US, the results of the companies also, the revolutionary tax reform actually realized, yet the indices started a significant weakening. The first and one of the major drops in the decline was the 2.70% surplus for US 10-year bond yields in the first week of February. Instead, the analysts now add t…